Big-city wi-fi efforts so far have failed to make a connection
BY SANDRA GUY Business Reporterfirstname.lastname@example.org September 24, 2012 6:58PM
Updated: October 26, 2012 2:19PM
Experts say cities have left behind a trail of failed efforts to extend broadband and faster wireless services to under-served neighborhoods, and they don’t expect Chicago’s revived initiative to fare any better.
They cite Kansas City, Mo., as a potential success story — still not played out — because it has the backing of tech powerhouse Google and comes with detailed plans and offerings, though much of the agreement between the city and Google remains private.
Scores of municipal efforts to bridge the digital divide have failed or are raising questions such as whether disadvantaged people are being served first.
In August, Google backtracked on a commitment to open its network to competitors in its Google Fiber program, a new service it will provide in Kansas City, Mo., with Internet speeds up to 172 times faster than the U.S. average, according to GigaOm and the Daily Caller.
Other major cities, such as Philadelphia, Portland, Ore. and Seattle, have scrapped their wi-fi networks — though efforts pop up to reform them — when widespread access met with lower-than-expected subscribers, higher-than-expected costs and other problems, according to published reports. In Philadelphia, EarthLink exited the business in May 2008 due to higher-than-expected costs; MetroFi Inc. turned off Portland’s free Wi-Fi network in mid-2008; and Seattle unplugged its free municipal network to serve two neighborhoods and four downtown parks in April.
Changing the equation now is the entry of deep-pocketed companies such as Google and Apple, which aim to provide their own content over their own networks and devices, usurping traditional cable TV and set-top box manufacturers.
Lawrence I. Lerner, president of Chicago-based LLBC, a change-management consulting firm, and author of “Facebook for Your Business,” served as a member of the Chicagoland Chamber’s Small Business Council and as president of the Association of Internet Professionals when Mayor Daley proposed his broadband initiative.
He said Daley’s initiative failed to get off the ground, as will Mayor Rahm Emanuel’s, because Chicago has yet to show it is a “relevant” business community.
He said other cities are deploying “thought leaders” to spearhead detailed plans of how the mission will be accomplished.
“In Chicago, the mayor is saying, ‘You guys [Internet and wireless service providers] figure it out, and I’ll support you and give you access to the infrastructure.’ The role of government is to guide and advise. There needs to be direction to build an ecosystem that’s collaborative.
“Chicago needs to create infrastructure, business support and a positive environment, part of what’s called constructive disruption, to make the plan work,” Lerner said.
Steve Pociask, president of the American Consumer Institute’s Center for Citizen Research in Washington, D.C., said Chicago’s latest proposal is positive in its efforts to collaborate with a major technology company, but care must be taken in upsetting the competitive marketplace.
The Chicago metropolitan area ranks No. 20 in broadband speed on the National Broadband Map, a listing compiled by the National Telecommunications and Information Administration.
Pociask said most markets and neighborhoods nationwide already have the optimum number of broadband and wireless providers. Subsidizing another company’s entry into the market could cause problems, he said.
“It becomes a misallocation of resources when public dollars are spent to crowd out private investment,” Pociask said. “When none of the providers in a market can make money, no one will invest. And you don’t get the jobs and economic output and benefits that were promised.”
“Putting broadband in a neighborhood doesn’t mean that people will subscribe,” he said, pointing to those who cannot afford the service or who cannot afford computers.
Other efforts, such as providing people with low-cost computers, educating them about low-cost access already available and working with service providers to offer low-cost access, even if it’s slower than the most costly option, are essential, Pociask said.
On the other side of the assessment is Lindsay Mosher, executive director of the Illinois Technology Partnership, a Chicago-based technology advocacy nonprofit, who supports Emanuel’s plan because “he is asking for input from the public, the business community and private sector providers to create the best approach moving forward.”